B2B SMBs depend on cash flow to stay afloat. With smaller revenue than enterprise-level businesses, a constant flow of income is critical to covering receivables, carrying inventory, paying employees, and conducting marketing programs.
However, SMBs often lack the software necessary to pursue invoice payments. That presents an excellent opportunity for B2B Independent Software Vendors (ISVs), who can now offer their B2B customers automated Accounts Receivable (AR) as part of their software and, as a result, benefit from a recurring income stream.
According to a survey conducted by Intuit, 89 percent of SMBs said that late payments slow down their business growth. However, an easy integration of automated accounts receivable features specifically designed for B2B pain points can go a long way towards alleviating them.
An AR automation platform connects invoicing and seamless B2B payments, with reminders and auto pay features designed for B2B, all into one experience. This allows B2B companies to get paid on average 36 percent faster than current systems and free up almost two days every week for most clients.
Here’s how it works for an ISV’s client:
- Electronic invoice creation – The software sends a digital invoice with a link to the customer. The invoice’s data is automatically received via a two-way sync in real-time.
- Cash flow automation – Automated alert reminder emails replace time-consuming and uncomfortable phone calls. The content of each message, as well as when it’s sent and to whom, are all tailored to the recipient.
- Embedded payments specifically for B2B One single platform can streamline embedded payments by handling all invoicing, payments, auto-reconciliation, and AutoPay features. The application should also be able to accept large transactions while virtually eliminating held funds.
- Customer portal – Customers can be directly messaged at the invoice level with activity tracking, internal notes, and secure uploads (links, images, timesheets, and more). With this type of portal, customers can view payment history, make a secure payment, and set up their preferred method of payments like card, ACH, AutoPay, and others.
- Business insights – The software should provide real-time insights into outstanding balances, late payments by customers, and cash flow trends. Automated tracking can pinpoint AR problems, prioritize collections, and make smarter financial decisions.
Integrating unique B2B AR automation capabilities into an ISV’s offering is an easy way to increase its value proposition and customer loyalty. By providing additional financial functionalities, the ISV has an easy way to further cement its relationship with its clients.
For ISVs looking to integrate B2B AR services, select an automated AR provider designed purely for B2B that can process large ACH and credit card payments directly within one platform. This lowers transaction costs that would otherwise be paid to third-party processors and allows the ISV to receive a portion of the processing fee for each customer’s electronic transaction, thereby providing a recurring revenue stream to the ISV.
Still, finding the right automated AR platform that understands the unique issues facing B2B SMBs is not easy. That’s because most AR software is designed for the needs of B2C rather than B2B SMBs. Unlike B2C AR software, a B2B-specific offering must be able to handle large recurring transactions and approve payments without holding on to the funds for what could otherwise be days or weeks.
Given that an ISV’s B2B client interacts with many of its customers regularly, live support must be available to deal with any problems. For example, a manufacturer might ship multiple pallets of product to a regular customer. If one pallet arrives damaged, the customer should be able to report the issue immediately. With the right AR platform integration, the customer can use a portal to communicate the problem directly with the ISV’s client in real-time and share files and pictures documenting the damage for that particular invoice. Faster resolution means increased customer satisfaction and quicker payment, ultimately increasing business and recurring revenues for the ISV.
One example of a company that improved its AR automation platform integration is WeighPay. The company recently added Bill360’s AR automation platform to its waste and recycling industry software, helping its customers see increased satisfaction, financial efficiency, and improved operations through seamless billing and payments, all in a unified platform. Leveraging an integrated solution eliminates inefficiencies and improves accuracy for its customers.
With the increase in inflation and the subsequent need for businesses to carefully allocate their financial resources, all opportunities to maximize cash flow should be considered. Through its ability to increase payments and provide recurring revenues, B2B automated accounts receivable software is proving to be one of the most innovative and impactful solutions for doing so, both for ISVs and their customers.
